VOLUME 14 ISSUE 04 APRIL2016 .../media/Files/People/Ryan Frank/wslr_april_2016.pdfpractised as a solicitor in Hong Kong. [email protected] PROFESSORLORNECRERAR Harper Macleod

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On 3April the biggest data leakin history came to the forewhen the initial results of aninvestigation into 11.5 millionconfidential documents,dubbed the ‘Panama Papers’were made public. The recordsobtained by German newspa-per Süddeutsche Zeitung froman anonymous source andshared by the InternationalConsortium of InvestigativeJournalists (‘ICIJ’), reveal thedealings of Panama based lawfirm,Mossack Fonseca, and themyriad ways in which it helpedindividuals and companiesorganise and manage offshoretax regimes and shell compa-nies. Only part of the informa-tion has been processed, butinitial reports have identifiedpoliticians, former and currentworld leaders and publicofficials with the firm.Sport was not an exception

and the Panama Papers reveallinks to members of FIFA and

UEFA, including EugenioFigueredo, former President ofCONMEBOL, and include acontract co-signed by thecurrent President of FIFA,Gianni Infantino, during histenure as Director of LegalServices at UEFA for the sale ofUEFA Champion’s Leaguebroadcasting rights to anEcuadorian TV channelthrough an intermediarycompany currently under inves-tigation by US authorities.Alsomentioned in the documents isLionel Messi, who is due incourt on 31 May on tax fraudcharges,who allegedly incorpo-rated an offshore company tomanage his image rights.For StephenHornsby,Partner

atGoodmanDerrick LLP, it wasnot a shock to find sportspersonalities mentioned in thePanama Papers. Hornsbyexplains, however, that the solereference and link to MossackFonseca is not an automatic

confirmation of wrongdoing,“there is a distinction betweenMessi type issues - usingoffshore jurisdictions to shieldwealth - and using such juris-dictions to cover corruption.”In particular, with regard to

the transaction involvingUEFAand Infantino, Hornsby addsthat“selling at an undervalue isa classic way of setting up afund for bribes. So no surprisesthat the UEFA contract (theexistence of which was previ-ously denied) is regarded as themissing piece of the jigsaw bySwiss authorities,”which raidedUEFA headquarters on 6 April.The revelations raise questions

aboutwhether sports governingbodies should be able to sellcommercial rights withoutsupervision. Hornsby suggeststhat“for each tournament thereshould be a tender for agenciesand the organiser should havean independent person on theselection panel.”

The World Anti-DopingAgency (‘WADA’) issued on 13April a Notice to stakeholderson Meldonium which aims toprovide clarification on theexcretion time of Meldonium,asubstance included in thebanned substances list from 1January and which has beenreported in 172 positive anti-doping tests since the ban.Claude Ramoni, of Libra Law,

explains: “as far as I am aware,the pharmacokinetic ofMeldonium is particular as thissubstance follows nonlinearpharmacokinetics. The

substance may remain ‘stored’in the body and it is quite diffi-cult to estimate how thesubstance is excreted and forhow long it can be detectedwithout proper studies.Nevertheless, it appears nowquite certain that a relativelylow concentration of thesubstance may be found in theurine for at least two months.”Ramoni notes there “was

clearly a need for clarificationfor the whole anti-dopingcommunity, in particular forNADO’s or IFs who have toissue decisions on Meldonium

cases,” and adds that “the clari-fication published by WADAnow gives anti-doping organi-sations information allowingthem to apply the rightsanctions to each case.”WADA’sNotice provides hope

to athletes who tested positivefor a lowurinary concentrationof Meldonium who may nowbenefit from a decision recog-nising ‘No Fault or Negligence’,but adds pressure on thosewitha higher concentration whomay find it more difficult toprove they stopped taking thesubstance before the ban.

Panama Papers reveal linkswith senior ranks of sport

The UK government launchedan inquiry on 3 April intoUKAD’s handling of an investi-gation into alleged dopingactivities by British doctor,Mark Bonar, regardingsustained doping involving UKathletes and football players,following a report by TheSundayTimes.UKAD in a state-ment explained that their inves-tigation was thwarted by thelack of jurisdiction on Dr.Bonar and the absence ofevidence to refer the case to thecorresponding medical board.Dr. Gregory Ioannidis, a

Senior Lecturer at SheffieldHallamUniversity, stresses that“[t]he authorities have a legaland moral duty to ensure thatthey investigate all allegations.They may not have jurisdictionto investigate independentdoctors and other third parties,but they can cooperate andseek the assistance of WADA,the General Medical Counciland other government depart-ments andnational law enforce-ment agencies.” Dr. Ioannidissuggests that the problem arisesmainly as a result of howdoping is monitored andregulated: “in the long run, it ismy view that self-regulationcannot deal adequately withsuch matters. External regula-tion, in the form of criminali-sation is the answer.”

Inquiry intoUKAD’s dopinginvestigation

WADA’s Meldonium excretionNotice opens possible defence

Discrimination USwomen’s soccer 03eSports Structure andleague ownership 05Case Law Overduepayables review 08WearablesWearabledata use in sport 12Q&A The AmnestyInternational report 16

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MICHELE BERNASCONIBaer & Karrer AGMichele A.R. Bernasconi is a partner atBaer & Karrer AG. He advises sportassociations and federations with regardto litigation, transfers, and other matters.He has experience with broadcasting,media, sponsoring, match-fixing andadvises clubs and athletes in connectionwith transfer agreements, doping andimage rights. Michele is a member of theCAS and is Academic Co-director of theMaster on International Sports at theUniversity of Zurich and of the UEFAFootball Law [email protected]

MICHAEL BRADERWiggin LLPMichael is head of the of the sportsgroup at Wiggin LLP. He advises sportsclients, including rights holders andsports rights management andinvestment companies, specifically aboutbroadcast and new media rights. Heregularly advises on joint ventures andstrategic partnerships between sports-based interests. Michael was a Partner atOlswang from 1995 and before thatpractised as a solicitor in Hong [email protected]

PROFESSOR LORNE CRERARHarper MacleodProfessor Crerar LLB (Hons) NP is afounding partner of Harper Macleod andis presently its Chairman. He is retainedby several institutions as their principallegal advisor. Formerly a senior rugbyreferee, Lorne is advisor to The ScottishRugby Union on legal issues regardingdiscipline and their Discipline PanelChairman. He is an International RugbyBoard ‘elite judge’ and was the JudicialOfficer for the Rugby World Cup [email protected]

MAX DUTHIEBird & Bird, LondonMax is a partner in the Sports LawGroup at Bird & Bird. A formerprofessional rugby union player, Max hasadvised on sports law issues in the UKand Australia. Max has acted forgoverning bodies, event organisers,rightsholders, sponsors, clubs [email protected]

JON ELLISCharles Russell SpeechlysJon is a commercial litigator whospecialises in sports law. He advises theFootball Association (‘FA’), and also hasexperience in cricket, horseracing andFormula One. He acted for the FA in itscase against Paul Stretford and inimplementing the current Player AgentsRegulations; acted for the Indian PremierLeague (‘IPL’) in prosecuting its first everdoping case; and advised YorkshireCricket Club on disciplinary [email protected]

LUCA FERRARIWithers LLPLuca joined Withers LLP in 2014. Hispractice focuses on contracts, regulatoryand disciplinary issues, labour andcommercial arbitration, disciplinaryproceedings, corporate and internationalcommercial transactions, personalinsurance, antitrust, copyright, medialicensing and production contracts.

[email protected]

PAUL J. GREENEGlobal Sports Advocates LLC, PortlandPaul J. Greene, the founder of GlobalSports Advocates LLC, is recognised byChambers USA and Super Lawyers as aleading US sports lawyer. Paul hashandled sports law matters around theworld, including numerous hearingsbefore the Court of Arbitration for [email protected]

OWE HJELMQVISTSetterwalls, SwedenOwe is a partner and head of SetterwallsLaw Firms Sports, Media andEntertainment Law Department. He hasacted as counsel for the media andentertainment industry in Swedenincluding organisers of events, TVchannels and newspaper magazines. Hehas also acted as counsel for theSwedish Football [email protected]

GREGORY IOANNIDISSheffield Hallam University and KingsChambersGregory is a sports lawyer recognised forhis expertise in anti-doping litigation andother sports regulatory matters. One ofhis most notable cases was the GreekSprinters case, where he acted asCounsel for Mr Kenteris and Ms Thanoubefore the CAS and negotiated a multi-million pound out-of-court settlementwith the IAAF. He is a senior lecturer atSheffield Hallam [email protected]

AMRUT JOSHIGamechanger Law AdvisorsAmrut is the Founder of GamechangerLaw Advisors, a sports consulting firmwith a presence in Bangalore, India andSingapore. Amrut advised athletes,management companies, leaguepromoters in a previous role as a [email protected]

GREGOR LENTZELentze Stopper Rechtsanwälte, GermanyGregor is Managing Director of LentzeStopper Rechtsanwälte. He waspreviously Managing Director of FIFAMarketing & TV Germany and Head ofLegal Affairs at FIFA Marketing AG. Headvises international sports federationsand clubs on commercial sports [email protected]

PROFESSOR RICHARD MCLARENWestern University CanadaMember of the Faculty of Law atWestern University Canada. Chairman ofthe Advisory Board Marquette UniversitySports Law Institute. Founding Co-ChiefArbitrator of the Sports DisputeResolution Centre of Canada. Arbitratorfor National Hockey League salaryarbitrations & NHL Players’ Associationagent disputes. President of FIBA’sBasketball Arbitral [email protected]

DR. LAILA MINTASConsultantLaila is a Lawyer and Consultant.Previously, Laila served as Director ofSports Integrity at CONCACAF andHead of Legal and InternationalDevelopment for FIFA's Early WarningSystem. She is a professor for Sports

Law at the ISDE program at ColumbiaUniversity and St. Johns [email protected]

MIKE MORGANMorgan Sports Law LLPMike Morgan founded Morgan SportsLaw LLP after spending over eight yearsworking within the Sports Law Group atan international law firm. He advises onregulatory and disciplinary issues, withparticular experience advising on doping,corruption and selection [email protected]

WARREN PHELOPSK&L GatesWarren is Head of the Global SportsPractice. He specialises in businessissues relating to sport: in particularrights ownership and exploitation;corporate structuring and strategy; jointventures; commercial; betting andgaming and media. He is co-author ofButterworths: Sports Law & Practice,and is also a Director of the EuropeanSponsorship [email protected]

ANTONIO RIGOZZILévy Kaufmann-Kohler, SwitzerlandAntonio is a founding partner and headsthe sports law and arbitration practice atLévy Kaufmann-Kohler. As an advisor tointernational federations, clubs, teams,athletes and others, he specialises inacting as counsel before the CAS, theBAT and other tribunals, as well as inrelated court [email protected]

MICHAEL STIRLINGGlobal SponsorsMichael Stirling is retained as an advisorby Champions League football clubs andacross sport. He provides analysis forBSkyB, CNN, BBC, Bloomberg TV andITV. He has been published in the WallStreet Journal, the FT, Forbes,Newsweek and [email protected]

RICHARD VEROWSky SportsRichard is Commercial Director - SkySports. Previously a commercial lawyer forthe International Cricket Council; hasworked in entertainment, media and sportand was senior counsel for [email protected]

TREVOR WATKINSPinsent MasonsTrevor is Head of Sport at PinsentMasons. He led the rescue andrestructuring of AFC Bournemouthbefore becoming Chairman. He advisesclients in the fields of horse racing, rugbyand motor sport. He representssponsors, rights holders, governingbodies and [email protected]

DAVID ZEFFMANOlswang, LondonDavid is a partner and head of the sportspractice at Olswang. His clients includeAttheraces, the British HorseracingAuthority, Eurosport, FIFA and the RFU.He has previously advised theGovernment on the future funding ofBritish [email protected]

THE MONTHLY JOURNAL FOR SPORTS REGULATIONVOLUME 14 ISSUE 04 APRIL 2016WWW.E-COMLAW.COM

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In a dispute that may affect thefuture of women’s soccer and theSummer Olympics, on 3 February2016 the United States SoccerFederation (‘USSF’) filed an actionfor declaratory relief against theUnited States Women’s NationalSoccer Team Players Association(‘USWNT’) requesting that theIllinois Federal District Courtdeclare that a binding CollectiveBargaining Agreement (‘CBA’) is ineffect between the parties,preventing the USWNT fromstriking in order to gain bargainingleverage during negotiations inadvance of the 2016 SummerOlympics.On 30 March 2016, the USWNT

countered by filing anadministrative claim with theUnited States Equal OpportunityEmployment Commission(‘EEOC’), alleging that USSFdiscriminates against female soccerplayers by paying themsignificantly less than their malecounterparts without any validlegal justification. The outcome of

the competing claims could havesignificant implications for theimmediate future of US women’ssoccer and the upcomingOlympics.

The 2005 CBAThe USSF and USWNT wereparties to a CBA entered into inDecember 2005 (the ‘2005 CBA’)which contained a no-strike/no-lockout provision, providing that‘[n]either the [USWNT] nor anyplayer shall authorize, encourage,or engage in any strike, workstoppage, slowdown or otherconcerted interference with theactivities of the [USSF] during theterm of this [CBA].’ The CBAexpired on 31 December 2012.

The parties’ MOUIn subsequent negotiations, theparties agreed to a Memorandumof Understanding (‘MOU’) withvarious provisions concerningcompensation and other terms andconditions of employment, butwithout a no-strike/no-lockoutclause. According to USSF, theparties contemplated that the 2005CBA and the MOU wouldeventually be combined into asingle document, and agreed that,until then, the new CBA wouldconsist of the terms of the 2005CBA (including the no-strikeclause) as modified or amended bythe terms of the MOU. USSFcontends that the term of the newCBA was four years - expiring afterthe 2016 Olympics - as set forth ina provision that reads ‘Term ofWNT Contract - 4 years.’In December 2015, USWNT

notified USSF of its intention toterminate or modify the MOU, andto challenge the existence of abinding CBA. In a series of emails,USWNT expressed its position thatno CBA was in place, that theMOU is terminable at will, andthat USWNT was consideringterminating the MOU. USWNT

requested bargaining prior to thecommencement of March trainingcamps.

USSF brings suitThe parties met on 3 February2016, and during that meeting,USWNT allegedly refused USSF’srequest for assurance that USWNTplayers would not engage in astrike prior to December 2016.USWNT’s position provides it withsubstantial bargaining leverage innegotiations for a new CBA, as astrike could jeopardise the team’sparticipation in the 2016Olympics. USSF has acknowledgedthis, stating that “[g]iven theextreme consequences [of a strike],the only alternative for US Soccerwould be to accede tounreasonable negotiation demandsfrom the [USWNT] to avoid suchdetriments.” Thus, USSF filed suit,seeking a judicial declaration that abinding CBA is in effect (consistingof the terms of the 2005 CBA andthe MOU) through to December2016, including the no-strikeclause.USWNT claims that USSF has

known of USWNT’s position sinceJuly 2015; that if the parties’ intentwas to incorporate the terms of the2005 CBA, they would have doneso; and that USWNT has notthreatened to strike (it merelyreserved the right to strike).The court has granted an

expedited discovery and dispositivemotion schedule. If the court isable to resolve the case onsummary judgment motions to beargued in May 2016, a decisionmay follow shortly thereafter. But ifa trial is necessary, the matter maynot be resolved before the 2016Olympics.

USWNT counters with paydiscrimination claimOn 30 March 2016, in the midst ofthe federal lawsuit, five prominentfemale players on behalf of the

World Sports Law Report - April 2016 03

DISCRIMINATION

US women’s soccer disputecould jeopardise Rio entryThe United States Women’sNational Soccer Team, arguably themost successful women’s side inthe sport, has recently ralliedagainst the US Soccer Federation’spolicies on player compensationthat results in lower pay for femaleplayers. The discussion could haveoverarching implications for soccernot only in the United States butaround the world. Frank Ryan,Harriet Lipkin, Kevin Harlow andMatthew Ganas of DLA Piperexplain the origin of thisconfrontation, the proceedingsinitiated by each party and thepotential consequences for theNational Team’s participation in theupcoming Rio Olympic Games.

Frank Ryan

Harriet Lipkin

By reservingits right tostrike, theUSWNT canpotentiallyjeopardisethe UnitedStates’participationin the 2016Olympicsand, to someextent, theimmediatefuture ofwomen’ssoccer in theUnited States

World Sports Law Report - April 2016

position is ultimately successful, ithas certainly increased theUSWNT’s bargaining leverage andposition in renewed CBAnegotiations. Although USwomen’s soccer has been steadilyincreasing in popularity, publicattention is most focused aroundthe World Cup and OlympicGames. By reserving its right tostrike, the USWNT can potentiallyjeopardise the United States’participation in the 2016 Olympicsand, to some extent, the immediatefuture of women’s soccer in theUnited States. According to theUSSF, should the USWNT strikeafter the time passes for the USSFand the United States OlympicCommittee to submit an alternateplayer roster, the USSF may beunable to name a replacementOlympic team and could be forcedto withdraw from the Olympics ‘tothe substantial embarrassment, andfinancial detriment, of US Soccer,the USOC and the United States.’While the pay discrimination

charge is unlikely to immediatelyimpact the USWNT’s participationin the Olympics, it has increasedthe pressure on the USSF bydrawing significant publicattention to the pay disparity at atime when the USWNT’spopularity is peaking. The timingis also opportune from a legal andpolitical standpoint, as there iscurrently substantial debate overthe interpretation and applicationof equal pay laws and a renewedpush for strengthened protections.As to the merits of the competing

claims, the outcomes remainuncertain. In the federal courtaction, from the filings to date, itappears that the written terms ofthe MOU do not expressly providethat the terms of the 2005 CBA willcontinue in effect, and that theparties anticipated completing afull successor CBA at a later time.The case will depend largely upontestimony of those involved in

negotiations, the parties’bargaining history, and theirinformal correspondence. If suchevidence is disputed, the case maynot be conducive to resolution ona pre-trial summary judgmentmotion, which means that, unlessthe parties settle out of court, thereis a considerable chance that thelawsuit will not be resolved beforethe 2016 Olympics. If, however, theUSSF were to prevail on summaryjudgment, the USWNT will losethe current ace in its pocket -threatening to strike before the2016 Summer Olympics.In the EEOC charge, the USSF

will likely bear the burden to provethat bona fide factors other thansex explain the pay disparity. Inresponse to the players’ claim ofsubstantially less overallcompensation, the USSF’s pressreleases suggest that it will arguethat revenue, profit, and popularitydrive the pay differentials.Although the mere existence of aCBA is not an absolute defence topay discrimination, the USSF’scounsel has also noted that thereare CBA variations morefavourable to women, such ashealth, injury, and severancebenefits, as well as maternity leave.Regardless of which side ultimatelyprevails, the charge and anysubsequent lawsuit are unlikely tobe resolved quickly, furtherstrengthening the USWNT’sbargaining leverage in continuednegotiations.

Frank Ryan PartnerHarriet Lipkin PartnerKevin Harlow AssociateMatthew Ganas AssociateDLA Piper, New [email protected]@dlapiper.com

DISCRIMINATION

04

USWNT filed an administrativeclaim with the Equal EmploymentOpportunity Commission(‘EEOC’), alleging that femaleplayers are paid significantly lessthan their male counterpartswithout any valid legaljustification. The claim alleges thatthe women’s team has enjoyedmuch more on-field success, thatthe women’s team membersperform substantially the sameduties as the men’s team, and thatthe women’s team is moreprofitable for the USSF than themen’s team, yet the women arepaid substantially less than themen. In response, the USSFemphasised its efforts to advancethe women’s game, including itscampaign to introduce women’ssoccer into the Olympics, theinclusion of prize money for thewomen’s World Cup, and itsfounding of the National Women’sSoccer League. It also criticised theaccuracy of the figures cited by thefemale players, claiming that themen’s team produced revenue andattendance figures about doublethat of the women’s team, and thatmen’s team’s television ratings werehigher.If the parties are unable to resolve

this dispute through a mediatedsettlement, the next step will be forthe EEOC to investigate the charge.Given the magnitude and scope ofthe charge, that investigation isunlikely to close before the 2016Olympics. If the EEOC findsprobable cause of paydiscrimination, it may thenprosecute a federal court action onthe female players’ behalf, or theplayers can pursue the casethrough private counsel. Even ifthe EEOC finds no probable cause,the players can still pursue theirclaim in federal court.

Practical implications of theactionsWhether or not the USWNT’s

Matthew Ganas

Kevin Harlow

The global phenomenon ofcompetitive gaming that hasfacilitated the rise of eSports overthe last few years has meant thatthe value of prize money,sponsorship and streamingopportunities have risenexponentially alongside the sport.This has coincided with majorinvestment by well known namesand organisations including MarkCuban1, the entrepreneur andowner of the National BasketballAssociation’s (‘NBA’) DallasMavericks, and Amazon, which ofcourse purchased Twitch2 in thesummer of 2014 for around $1billion.The revenue increase for those

involved has grown at a startlingpace compared with traditionalsports. Whilst the increase infunding at all levels is a boon foreSports, there is a much greaterrisk of quick growth leading toproblems like conflicts of interestand competition law issues.

Conflicts of interest,competition law and integrityAt the moment, unlike mosttraditional sports, eSports has nocentralised governing body toapply and enforce a standardisedset of rules across the industry toprevent competitive conflicts. Thishas meant that the ownership andrunning of leagues andtournaments has been left to themarket. Within the last year, two ofthe biggest operators, MajorLeague Gaming (‘MLG’) and theElectronic Sports League (‘ESL’),have been acquired by verydifferent kinds of entity. MLG isowned and operated by ActivisionBlizzard which produces manypopular eSports games like Call ofDuty and Starcraft whilst the ESL,the self proclaimed ‘world’s largesteSports company,’ had the majorityof shares in its holding company,Turtle Entertainment, bought bythe Modern Times Group3 (a

digital entertainment company) inthe summer of 2015.The potential for conflict of

interests and competition lawconcerns are clear in both MLGand ESL’s ownership structures.MLG controls access to some ofthe major games that are used ineSports and could in theory createanti-competitive rules such as onlylicensing Call of Duty to thetournaments and leagues operatedby Activision Blizzard. On theother hand, a large mediaconglomerate like the ModernTimes Group, which has alsoacquired the biggest ScandinavianeSports event organiserDreamHack4 and presumably maybe looking to acquire others, couldmake it harder for smaller leaguesand competitions to compete andsurvive potentially causingcompetition law complaints.Another area of concern is the

possibility of a single ownercontrolling more than one team. Ifteams sharing a controlling ownerare able to compete in the sametournaments or leagues, this maylead to integrity concerns as theteams could meet each other, andthe owner could theoreticallyarrange matters in favour of one orother team. In some traditionalsports regulation is in place toaddress this possibility. Forexample, Rule I.5 of the Rules ofthe English Premier League (‘EPL’),prohibits the holding of more than10% of the shares in any EPL clubby anyone who has shares in anyother club.

Possible model ownershipstructuresUnsurprisingly perhaps in thisincreasingly digital and connectedworld, eSports is at presentdeveloping and consolidatingconsiderably quicker thantraditional sports ever did. It is notunreasonable to imagine theorganisation and ownership


ESPORTS

eSports: league ownership,structures and growing pains

The growth of eSports hasoutpaced the development ofcommercial, legal and integritystructures. As often happens withtechnology driven business, eSportsis several steps ahead of anyattempt to regulate and organisethe activity. Nick White and DanielAlfreds of Couchmans LLP reviewthe issues arising from the growth ofeSports, particularly the need for anadequate league structure, and theintegrity issues and conflicts ofinterest in this constantly changingarena.


The owner investors of successfulteams are rewarded in the firstplace by an increase in themanagement fee rather thanthrough an increase in the value ofthe club they operate. If the leagueas a whole does well, the ownerinvestors - and the non-ownerinvestors - will all benefit from anincrease in the value of theirinvestment.The integrity of the structure in

terms of sporting competition isseldom questioned. All teams areessentially in the same position inthat they have a common owner.This structure was challenged inthe US courts in Fraser v. MajorLeague Soccer5, however, in whicheight MLS players claimed that theMLS and its investors acted as asingle entity and unlawfullylessened the value of its players’services and conspired tomonopolise the first division ofsoccer. The District Court (andlater the Court of Appeals)dismissed the claim based on thefact that the MLS was bothcompeting with other soccerleagues in the US and soccerleagues around the world. A singleownership model has not to ourknowledge been tested in Europe.

2. Team ownership of the leagueVariations on this model are fairlycommon. Perhaps the mostfamous example is the EPL.Under this structure the EPL is a

private limited company that has21 shareholders. Each of the 20clubs that are playing in thecompetition at any given time isgranted a share (together with theEnglish Football Association’s‘Golden Share’).Each member club is

independent from the others and isrun in accordance with the rules offootball. Whilst the EPL isresponsible for the day to dayrunning of the competition (aswell as various other administrative

tasks like UEFA licensing) theshareholders are the ultimatedecision making body.Both the clubs and the EPL

propose rules with each club beingentitled to a single vote. All rulechanges and major commercialagreements require the votes oftwo thirds of the clubs (14 in total)to be agreed. All commercialrevenues are then divided equallybetween the members withadditional funds being grantedbased on TV appearances andfinishing league positions withindividual club revenues beingretained.The integrity of the league is kept

in check by each team having anequal weight of vote and internalrules like Rule I.5 mentionedabove.

3. FranchiseThe MLS aside, the majorprofessional sports in the US tendto be based on a version of thismodel. The NBA for example is anunincorporated body, run as ajoint venture between the teams.Each team is licensed by the NBA

to associate itself with the leagueand operate in accordance with theNBA Constitution and Bylaws (the‘Rules’), usually in an exclusiveterritorial zone. Team ownerstogether own a corporate entitycalled NBA Properties that hasexclusive control over the licensingof the league itself and the teams.The Rules set out what the league

together with each team can do.The NBA has a Board ofGovernors which is made up of arepresentative from each team.Whilst in general the league itselfsets its own rules the Board ofGovernors can vote on certainissues such as new franchises andthe removal of a franchise owner6.The financial model has varied

over time but usually means thatall of the franchises place a certainamount of their individual revenue

ESPORTS

06

structure of the major leaguesconverging with those found intraditional sports. In the absence ofa unified worldwide governingbody to administer eSports, welook below at three ownershipmodels and structures currentlyfound in traditional sports that wecould find eSports leagues,tournaments, publishers and teamsdeveloping:1. the single owner model;2. the team ownership model;

and3. the franchise model.

1. Single ownership of the teamsMajor League Soccer (‘MLS’) isprobably the biggest league to datethat has successfully applied asingle owner model.Under this structure the MLS

owns outright each team thatparticipates in the league andtherefore has the sole power torecruit players, negotiate theirsalaries, pay the players fromleague funds and to a large extentdecide which team the players playfor.The league itself is owned by two

distinct groups, owner investorsand non-owner investors. Thesegroups form the MLSManagement Committee which isin charge of running andorganising the league.The owner investors have signed

operating agreements with theMLS allowing them to operateteams, for example AEG with theLA Galaxy and Stan Kroenke withthe Colorado Rapids. Whilst bothAEG and Kroenke might bereferred to as ‘owners’ of the teamsthey only in fact have stakes in theMLS itself.The MLS Management

Committee pays a management feeto each team operator which isusually based on a share of allsponsorship and local broadcastrevenues and approximately 50%of any match day revenue received.

Nick White

into the league, perhaps 50%,which then uses a formula todistribute this pot amongst all ofthe teams based on variouselements. The result is that morecommercially successful teams mayin fact be net contributors to theleague (as the amount they put inis greater than what they receive)whilst others will be net recipients.This more ‘egalitarian’ approach ishighly characteristic of Americansport and contrasts with the more‘free market’ approach of, forexample, the EPL.

ConclusionThere are currently hundreds ofteams worldwide competing in avariety of eSport tournaments.Even though some teams havestarted to establish themselves aspermanent fixtures on the eSportsscene this is the exception ratherthan the rule. A striking example ofthis is shown by Valve’s ‘TheInternational’ Dota 2 tournamentin which 72% of the teams thatcompeted in 2013 no longerexisted a year later7.Part of the longer term solution

to this problem may lie in thestructures adopted by thetournaments, leagues and teams. Atpresent, the identity ofparticipating teams in mosttournaments or leagues involveinvitation, qualification or acombination of the two. In termsof stability and a sense ofpermanence for the tournaments,leagues and teams, such a model isprobably less effective than any ofthe structures looked at above.The team ownership model

whereby the teams own the league(like the EPL) seems to be a longway off, especially with suchunpredictability concerning whichteams will still be around in ayear’s time. A model of this kindmay become a more realisticpossibility if leading teamscontinue to consolidate and

become more robust and powerfulbut the sport seems to have a wayto go yet. There is anotherchallenge as well: any suchstructure would need to take intoaccount and recognise theconcerns and demands of thepublisher as an eSport league ortournament is nothing without thegame itself.If eSports is to continue to grow

and flourish, some of thecompetition law concerns andintegrity issues referred to earlier inthis piece will need to be tackled.Governance structures andregulatory frameworks will beneeded to develop and mature. Atthe same time, eSports will need tofind ways of increasing the level ofcertainty and stability around itsleagues and teams. One intriguingpossibility is that a publisher ortournament organiser will seekeither to establish or acquire itsown teams thereby potentiallyconstituting a single ownershipmodel. Stability would be achievedwith all of the power and controlover an eSport being consolidatedin one place. However, such astructure will also place all of thecommercial risk on theorganisation running it.Mitigating this issue, and creating

a system whereby somecommercial risk is spread to theteams, may be achieved in part inthe short and medium termthrough evolution from thecurrent ‘invitation/qualification’model to a version of the morerobust - if more rigid - franchisemodel. Developers, tournamentorganisers and perhaps in duecourse governing bodies will beable to set clear rules on ownershipand potential conflicts of interestwhilst ensuring all eSportsstakeholders have greater certaintyover which teams will beparticipating in which events nextyear, the year after, and so on. Thisstability should in turn help to

draw in more sponsors andinvestors, and may also increasecompetition for the rights amongstbroadcasters and/or streamingplatforms.Speculation of this nature is of

course a recipe to be proven wrongand given the central role played ineSports by rapidly evolving digitaltechnologies and networks, we areonly too aware that makingpredictions is an uncertain game toplay. Right or wrong, the future ofeSports is fascinating and we lookforward to following andparticipating in its continuingevolution.

Nick White PartnerDaniel Alfreds AssociateCouchmans LLP, [email protected]@couchmansllp.com

Disclaimer: this article was finished andsubmitted before FACEIT and Twitchlaunched the eSports ChampionshipSeries under a co-ownership model on 6April 2016.

1. http://www.polygon.com/2015/11/23/9782788/mark-cuban-esports-colin-cowherd-idiot-fined2. http://www.bbc.co.uk/news/technology-289307813. http://www.turtle-entertainment.com/news/mtg-to-acquire-the-majority-stake-in-the-worlds-largest-esports-company/4. https://www.mtg.com/press-releases/mtg-acquires-dreamhack/5. 284 F.3d 47 (1st Cir. 2002).6. http://www.cbssports.com/nba/writer/ken-berger/24657297/sale-of-clippers-to-steve-ballmer-closes-donald-sterling-out7. http://www.dailydot.com/esports/dota-2-prize-distribution-players/


ESPORTS

If eSports isto continueto grow andflourish,some of thecompetitionlaw concernsand integrityissuesreferred toearlier in thispiece willneed to betackled

Daniel Alfreds


rent14, etc. Where a contract merelystipulated the player’s entitlementto a round-trip flight ticket, theclub’s financial obligation wasvalued using the informationprovided by FIFA Travel15.A transfer agreement provided

for penalties at a rate of 10% foreach installment of the transfer feethat would be overdue. Thesepenalties were granted as separateprincipal amounts, themselvesinducing interest16. Hence, itappears to be possible tosuccessfully lodge a claim solelywith respect to penalties when thecorresponding principal amountshave been paid after their duedate17.At present, no cases on fast track

proceedings handling overduetraining compensations and/orsolidarity contributions have beenpublished.In any event, the club’s financial

obligations must be fullysubstantiated and unconditional.Bonuses allegedly stipulated in theclub’s internal rules but not in theemployment agreement were notgranted in absence of a copy of thesaid internal rules18. A signing feesubject to the agreement of boththe club and the player was notretained19.

What is a prima faciecontractual basis?Pursuant to Article 12bisparagraph 2, clubs can justifyoverdue payables by invoking aprima facie contractual basis. Atpresent, no prima facie contractualbasis was accepted in any of thepublished cases. External eventslike the entry of newshareholders20, financialdifficulties21, payment difficultiesrelating to bank authorisations22 orissues following the hosting ofevents by third parties in the club’sstadium23 do not exempt clubsfrom fulfilling their financialobligations.

What determines theapplicability of Article 12bis intime?The signing date of the underlyingagreement nor the due date of thefinancial obligations determine theapplicability of Article 12bis. Thesole decisive element is the date ofthe lodging of the claim: Article12bis applies to all claims lodgedafter 28 February 2015, even if theunderlying agreement was signedand/or the financial obligationswere due before this date24.

Who can lodge a claim?It is generally accepted that theprotection of Article 12bis islimited to players and clubs.Nevertheless, it has been assertedthat coaches would also fall withinthe scope of Article 12bis25. Atpresent, no cases on fast trackproceedings involving otherindividuals than players have beenpublished.

When to lodge a claim?Pursuant to paragraphs 2 and 3 ofArticle 12bis, a club is consideredas having overdue payables in caseit has delayed a due payment formore than 30 days and the creditor(player or other club) has put theclub in default in writing, grantinga deadline of at least 10 days (notbusiness days).It is generally accepted that the

default letter can only be sent asfrom the 31st day after the relevantdue date. Hence, clubs are granteda grace period of 41 days. However,a salary payment that was (i)included in a default letter, (ii) notdelayed for more than 30 days atthe moment of the sending of thedefault letter and (iii) delayed formore than 30 days at the momentof the decision, was added to theoverdue payables26. Consequently, itappears to be possible tosuccessfully put a club in default asfrom the 1st day after the relevantdue date and lodge a claim as from

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08

Which kind of agreementscan be enforced?Article 12bis paragraph 1constitutes an affirmation of thebasic legal principle of pacta suntservanda: clubs are required tocomply with their financialobligations as per the termsstipulated in their contracts withplayers and in their transferagreements with other clubs.The contracts with players are not

limited to employment agreementsbut also cover related settlement ortermination agreements1 as well asprivate agreements2. The transferagreements include both transfers3

and loans4.

Which kind of overduepayables can be claimed?The financial obligations resultingfrom the abovementionedagreements are mainly salaries,signing fees5, bonuses6, terminationindemnities7, transfer fees8 andloan fees9.Moreover, Article 12bis can be

invoked with respect to anyfinancial obligation that iscontractually valuated: costs oftransportation (flights10, trains11,taxis12), costs of medicalinvestigation (ultrasounds13), and

A year of proceedings onoverdue payables in reviewArticle 12bis of the Regulations onthe Status and Transfer of Players(‘FIFA Regulations’) came into forceon 1 March 2015. The aim was toestablish an efficient and effectivemechanism with respect to overduepayables. Sébastien Ledure,Managing Partner of Koan Lorenz,and Wouter Janssens, Associate ofKoan Lorenz and AssistantProfessor of the University ofLeuven, provide a breakdown of thepublished case law on overduepayables under Article 12bis.

SébastienLedure

the 31st day after the relevant duedate, reducing the grace period to31 days.In any event, the two years statute

of limitation following paragraph 5of Article 25 of the FIFARegulations must berespected. Hence, any claim underArticle 12bis must be lodged beforetwo years have elapsed since thedue date of the relevant financialobligation.

Where to lodge a claim?Claims under Article 12bis can belodged with the Dispute ResolutionChamber (‘DRC’), the DRC Judge,the Players’ Status Committee(‘PSC’) or the PSC Single Judge asfar as they feature a dispute withan international dimension. Atpresent, no cases on fast trackproceedings with the PSC havebeen published.With respect to purely national

disputes on overdue payables, eachmember association was obliged tointegrally implement Article 12bisinto its domestic regulations. Atpresent, various memberassociations have not yetimplemented Article 12bis orappointed the competent body tohandle fast track proceedings. Theposition of clubs and players ofsuch member associations facingoverdue payables is beingjeopardised as a complaint againstsuch member associations filedbefore FIFA would not directlyresult in the recovery of theoverdue payables.

Is interest being granted?Interest can be applied on theprincipal amounts of the overduepayables as from the moment andat the rate stipulated in thecontract. However, excessive ordisproportionate rates can bemitigated or even rejected. Interestrates contractually stipulated at arate of 12% per annum wereaccepted27.

In default of contractualstipulations, interest is beingapplied ex officio at a rate of 5%per annum28 as from the momentrequested (at earliest as from theday after the relevant due date29 butalso as from the day of the lodgingof the claim30) or, in default of suchrequest, as from any momentbetween the lodging of the claim31

and 30 days after the date of thenotification of the decision32.

Is procedural compensationbeing granted?Neither the DRC33 nor the DRCJudge34 grant proceduralcompensation to the prevailingparty. While the PSC Single Judge,ex officio, grants proceduralcompensation to the prevailingclub35.The procedural compensation is

based on the following schedule(see Figure 1), irrespective of anyrequest from the prevailing club.The PSC Single Judge consistently

grants the maximum amount indefault of reply by the debtor club36

and a mitigated amount in case ofreply by the debtor club37. Theprocedural compensation appearsto be allocated at approximately20-35% to the prevailing club and65-80% to FIFA (see Figure 2). It

might be deemed paradoxical thatFIFA’s compensation and workloadrelate inversely.

Which kind of sanctions arebeing imposed?Despite their discretion resultingfrom the term ‘may’ in paragraph 4of Article 12bis, the competentbodies systematically imposesanctions to the condemned party,irrespective of any request from theprevailing party38. The followingcascade of sanctions can bedistinguished:� a warning if the club replied

and is not a recidivist39;� a reprimand if the club replied

and is a recidivist40;� a fine if the club did not reply

and is not a recidivist41;� a fine if the club replied and is

a recidivist42;� an elevated fine if the club did

not reply and is a recidivist43; and� a transfer ban if the club did

not in a timely manner execute thedecision and is a recidivist44.

What fines are beingimposed?The fines, which are allocated100% to FIFA, appear toapproximate the followingpercentages of the principal


CASE LAW

Overdue payables Procedural compensation

Up to CHF 50,000 Up to CHF 5,000




As from CHF 200,001 Up to CHF 25,000

Figure 1:Proceduralcompensation


Sébastien Ledure Managing PartnerWouter Janssens AssociateKoan Lorenz, [email protected]@koanlorenz.com

1. Decisions of 8 July, 5 October and 26November 2015 of the DRC Judge;decision of 15 October 2015 of theDRC.2. Decision of 16 September 2015 of theDRC Judge.3. Decisions of 7 May and 11 August2015 of the PSC Single Judge.4. Decisions of 11 June and 29 July2015 of the PSC Single Judge.5. Decisions of 12 June, 3 July and 3November 2015 of the DRC Judge;decision of 15 October 2015 of theDRC.6. Decisions of 2 September, 16September, 1 October and 3 November2015 of the DRC Judge; decisions of 15October and 6 November 2015 of theDRC.7. Decisions of 8 July, 5 October and 26November 2015 of the DRC Judge;decision of 15 October 2015 of theDRC.8. Decisions of 7 May and 11 August2015 of the PSC Single Judge.9. Decisions of 11 June and 29 July2015 of the PSC Single Judge.10. Decision of 16 September 2015 ofthe DRC Judge.11. Ibid.12. Ibid.13. Ibid.14. Decision of 3 November 2015 of theDRC Judge.15. Ibid.16. Decision of 11 August 2015 of thePSC Single Judge.

17. Ibid.18. Decision of 2 September 2015 of theDRC Judge.19. Decision of 3 November 2015 of theDRC Judge.20. Decision of 13 October 2015 of theDRC Judge.21. Decision of 6 November 2015 of theDRC.22. Decision of 7 May 2015 of the PSCSingle Judge.23. Decision of 11 August 2015 of thePSC Single Judge.24. Decision of 15 October 2015 of theDRC.25. ‘Article 12bis of the FIFA RSTPcelebrates its first birthday: an update,’15 February 2016, Thomas GeukesFoppen.26. Decision of 1 October 2015 of theDRC Judge.27. Decision of 11 August 2015 of thePSC Single Judge.28. Decisions of 7 May 11 and August2015 of the PSC Single Judge; decisionof 3 July 2015 of the DRC Judge.29. Decision of 29 July 2015 of the PSCSingle Judge; decision of 2 September2015 of the DRC Judge; decisions of 15and 27 October 2015 of the DRC.30. Decision of 8 July 2015 of the DRCJudge.31. Decision of 7 May 2015 of the PSCSingle Judge; decision of 15 October2015 of the DRC.32. Decision of 3 July 2015 of the DRCJudge; decision of 11 August 2015 ofthe PSC Single Judge.33. Decision of 15 October 2015 of theDRC.34. Decisions of 12 June, 8 July, 2September, 1 October, 13 October, 2November and 3 November 2015 of theDRC Judge.35. Decisions of 7 May and 11 August

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10

amounts of the overdue payables(see Figure 3):� imposed by the PSC Single

Judge: 5-15%;� imposed by the DRC: 15%;

and� imposed by the DRC Judge:

10-25% and up to 40% formoderate overdue payables.

How long do proceedingstake?Proceedings last on average one-two months and exceptionally upto six months.Pursuant to Article 12bis

paragraph 9, the lodging of a claimunder Article 12bis is withoutprejudice to the application offurther measures under Article 17to the FIFA Regulations.Considering (i) the grace period ofat least 31 days under Article 12bis,(ii) the duration of proceedingsunder Article 12bis and (iii) thegrace period of at least two orpreferably three months underArticle 17, under certaincircumstances it might be anoption for a player to counter thelack of timely execution of adecision under Article 12bis via theunilateral termination of theunderlying agreement inaccordance with Article 17.

WouterJanssens

Date of decision Reply Overduepayables

Procedural com-pensation

Prevailing club FIFA

7 May 2015 Yes €1,000,000 CHF 20,000 CHF 5,000 CHF 15,000

11 June 2015 No €95,000 CHF 10,000 CHF 2,000 CHF 8,000

29 July 2015 No €1,070,000 CHF 25,000 CHF 5,000 CHF 20,000

11 August 2015 Yes $690,000 CHF 15,000 CHF 5,000 CHF 10,000

Figure 2:Proceduralcompensation

2015 of the PSC Single Judge.36. Decisions of 11 June and 29 July2015 of the PSC Single Judge.37. Decisions of 7 May and 11 August2015 of the PSC Single Judge.38. So far, only in one case has nosanction been imposed: decision of 11August 2015 of the PSC Single Judge.39. Decisions of 13 October and 18November 2015 of the DRC Judge;decision of 15 October 2015 of the

DRC.40. Decision of 26 November 2015 ofthe DRC Judge.41. Decisions of 11 June and 29 July2015 of the PSC Single Judge; decisionsof 12 June, 16 September, 1 October, 5October, 13 October, 2 November, 3November, 12 November and 30November 2015 of the DRC Judge;decision of 15 October 2015 of theDRC.

42. Decision of 6 November 2015 of theDRC.43. Decisions of 3 July, 8 July and 2September 2015 of the DRC Judge.44. Decision of 27 October 2015 of theDRC; decision of 26 November 2015 ofthe DRC Judge.


CASE LAW

Competent body Date of decision Overdue payables Fine

PSC Single Judge 11 June 2015 €95,000 CHF 10,000

FPSC Single Judge 29 July 2015 €1,070,000 CHF 60,000

DRC 15 October 2015 $118,750 CHF 15,000

DRC 6 November 2015 $111,400 CHF 15,000

DRC Judge 12 June 2015 €39,000 CHF 5,000

DRC Judge 3 July 2015 $40,000 CHF 10,000

DRC Judge 8 July 2015 €4,500 CHF 2,000

DRC Judge 2 September 2015 €13,600 CHF 4,000



DRC Judge 1 October 2015 $34,200 CHF 5,000



DRC Judge 13 October 2015 291,000,000 (currency redacted) CHF 2,000

DRC Judge 2 November 2015 €5,000 CHF 1,000

DRC Judge 3 November 2015 110,000 (currency redacted) CHF 2,000



DRC Judge 7 December 2015 €15,000 CHF 2,000

Figure 3: The fines being imposed


They are virtually omnipresent andseen on the arms of everydayathletes chasing goals from walking10,000 steps during waking hoursto improving the quality of anight’s sleep. Whether trackingcycling mileage in Prague or caloricintake in Pittsburgh, fans ofwearable technology like Fitbit andJawbone, and their manycompetitors in the wearabletechnology sector, are theconsumer face of a global industrythat is expected to be worth inexcess of $53 billion by 2019 (amore than 11-fold increase over2014 sales), according to theInternational Data Corporation.But these wrist activity trackers

are just the tip of the wearabletechnology iceberg. Professionalsports leagues, clubs, teams andathletes are heavily invested incollecting and analysing theminutest elements of athleticperformance for an ever-growinglist of uses, including enhancingtraining and performance,preventing injury, and increasingfan engagement and experience,whether it’s live, broadcast orsecond screen.Along with the creation of vast

databases of performancemeasurement, however, comes ahost of difficult-to-anticipate legalissues, many of which are the resultof technology outpacing the law.

Wearables are all about thechipsEarly adopters, such as Europeanfootball clubs began to measure theoverall workload placed on playersmore than six years ago. In fact, achip designed by Adidas andimplanted in players’ boots helpedGermany take home the 2014 FIFAWorld Cup. Fans may have beensurprised to learn that themiCoach elite team system wastransmitting each athlete’sacceleration, heart rate, speed,distance, power and other details in

real time to iPads used byGermany’s coaches and trainersduring training sessions before andduring the competition. TheInternational Football AssociationBoard (‘IFAB’), the governing bodythat determines the rules ofinternational football, alsoapproved the use of wearableelectronic performance andtracking systems (‘EPTS’) incompetition during its annualbusiness meeting in February 2015.The use comes with two conditions- that the EPTS cannot be usedduring a real time match until ithas been proven to havepreventative medical benefits andthat it does not pose any danger toplayers on the field, and that thedata is not transmitted to coachesduring play (although half-timereview of data has reportedly notbeen ruled out by IFAB). In July2015, FIFA followed suit,announcing its approval of the useof EPTS and wearable technologyduring matches. At the end of2015, FIFA and IFAB werereviewing proposals by wearabletechnology manufacturers toestablish the companies as FIFAEPTS providers.Players throughout Australian

Rules football and Australianprofessional rugby use CatapultTechnologies’ OptimEye S5, whichutilises satellite reception (bothGPS and Glonass), and ClearSky, alocal positioning system (or indoorGPS). A vest fitted with a smalldevice at the top of the backcaptures data in real time, allowingstaff to make evaluations duringtraining or competition. There isalso the option to upload datafrom the device’s hard drivefollowing a session.Once collected, raw data can be

run through algorithms totranslate into information that isuseful to coaches and trainers. Anumber of cricket organisationsaround the world use Catapult’s

WEARABLES

12

Wearables technology datause in professional sportsThe development of wearabletechnology to collect live data fromtraining and competition hasopened a valuable informationmarket in the sports industry.Leagues, teams, players, evenagents and the media now demanda constant supply of intricateperformance information. BrianSocolow, Partner at Loeb & Loeb inNew York, discusses the recentevolution of the use of wearabletechnology in professional sportsand raises important questionsconcerning the legal challenges thatthis new market represents.

products - including Cricket SouthAfrica, Cricket Tasmania and theEngland and Wales Cricket Board,according to the company’s website- and there is a cricket bowlingalgorithm that measures the speedof a ball based on a bowler’s runup and release, and a goalkeepingalgorithm that monitors dives andjumps. This type of analysed datahas a number of uses. In 2010, theMarylebone Cricket Club (‘MCC’),known for its role as the guardianof the Laws of Cricket, beganfunding research into wearabletechnology to better detect illegalthrowing or ‘chucking’. The MCCentered into discussions with theInternational Cricket Council tofurther explore the issue andtechnology as a solution.In the United States, wearable

technology is widely usedthroughout the National FootballLeague (‘NFL’), National BasketballAssociation (‘NBA’) and MajorLeague Baseball (‘MLB’). Pitchersfrom at least 27 of 30 MLB teamsare benefitting from the MotusmThrow smart throwing sleeveand iOS app. In a pocket over theelbow, a small removable sensor’saccelerometers and gyroscopestrack arm movements with an eyetoward maintaining arm health.The device wirelessly transmits thethree-dimensional motion data toan app that calculates stress causedby torque on the ulnar collateralligament. Companies includingZepp Baseball, Diamond Kineticsand Blast Motion have alsodeveloped in-bat motion sensors totrack and analyse player swings.Data collected during traininghelps trainers, coaches and playerslearn how to optimise performanceand reduce the risk of injury.Professional basketball has also

embraced the wearable technologyrevolution. More than two dozenNBA teams use Catapult’sOptimEye (or similar technology)to track and analyse player

performance for using motionsensors on player jerseys. Thecombination of hardware andsoftware provides biomedical data,including impact forces, turn ratesand orientation, as well as tacticalinformation, such as two-dimensional animations of the playin real time or post-practice.As a league, the National Hockey

League (‘NHL’) has been slower toadopt analytics, but it is comingaround. Catapult is developingwearables that interpret skatingload and volume, player speed,force sustained in collisions andeven which of the skater’s legs isworking harder - all crucialtraining information for a sportthat loses more player time due toinjury than any other major sport.An average team loses 242 playergames each season, according to aToronto-based research study. It’sunclear how the NHL will use thestatistics generated by wearabletechnology in the future, butavoiding injuries will undoubtedlybe the main focus as it ramps upuse of analytics.Perhaps the most exciting

development in the use of data inAmerican pro sports will occurafter this season’s NFL draft andfree agency are completed in May.That’s when NFL team generalmanagers will get access tomountains of data known as ‘NextGen Stats’, which the leaguegathered during the 2015 season.The lead-up to this developmentbegan when all NFL players agreedto wear sensors as part of theircollective bargaining agreement in2011. Fast forward three years andthe NFL established a partnershipwith Zebra Technologies to outfitits stadiums with radio frequencyidentification signals (‘RFID’)technology and accumulateinformation collected using sensorson players’ shoulder pads. Thesensors capture precise locationmeasurements to within six inches

in real time during indoor andoutdoor games, as well as speed,acceleration and distance data.Zebra’s MotionWorks serversoftware processes the informationand produces a variety of statistics.The NFL teams will shortly have

access to the RFID data, and eachteam will decide how it wants touse the metrics. Last year alone,2,500 players were tagged withsensors, netting more than 180billion bytes of player positiondata. At the NFL owners meetingin Florida in March the leagueannounced that it will provideinformation to each team on itsown players. Additionally, the NFLwill unveil a platform to crunchthe numbers into usefulinformation for any team thatwants it. The league’s software willundoubtedly compete with quite afew outside vendors selling theirtechniques for slicing and dicingdata. At the MIT Sloan SportsAnalytics Conference in March,there was significant buzz aboutthe possibility of a new landscapefor the sport, as analytics becomemore mainstream in the NFL.While most franchises don’t knowprecisely all the ways that the datawill be used, a significant numberof analytics professionals are beinghired by teams that are alsoinvesting in technology systems tomanage metrics. In the mostprofitable of American sports,wearable technology statistics arealready influencing everythingfrom strategy on the field toscouting and salary capmanagement. The combination ofscientifically tracking players’competition and practiceperformance is viewed as a highlyvalued tool.

Wearable technology from thefan perspectiveNFL fans taking in the game at thestadium or at home areexperiencing a radically different


WEARABLES

Whether andto whatextent teamsand leaguescan imposethe collectionof personaldata onplayers, andwhat canthen be donewith theplayer data iscertainly anissue to becovered bycollectivebargainingagreementsand playercontracts


Other sports are following suit.The NHL’s San Jose Sharks andColumbus Blue Jacketscollaborated with tech startupGuitammer to develop a fanengagement experience that couldone day extend into the wearabletechnology arena. When players arecross-checked into the sensorsaround the rink, their seats in thestadium shake with the impact. A$300-$600 home adaptor kit isavailable for those fans who wantto experience more of an arena feelof the crashes and slams from thecomfort of their couches.ButtKicker Live’s 4D Sports beganwith sensors placed on the boardsat the San Jose and Columbus icerinks; the sensors captured anddistributed the impact of skaterhits to seats in their home arenasand fans’ homes. Since the NHLteam collaborations, the ButtKickerLive collection of kits has grown toinclude kits for fans of car racing,the NFL and other live events. Thepotential exists to enhance the fanexperience in myriad sports withwearable technology transmittedfrom sensors embedded in athletes’uniforms and equipment.

Warning: uncharted legalterritory lies aheadData ownership, access andprivacyWearable technology in pro sportsraises a host of issues around whoowns and has access to the data,and what constitutes acceptable useof that data. Currently, the ruleappears to be ‘he who collects thedata owns the data’ - and it appearsthat, at least in major league sportsin the US, the leagues and teamsown at least the raw data, as well aswhatever aggregation and analysisthey undertake.Here’s the rub: what can they

acceptably do with thatinformation?Data collection by any employer

carries significant concerns, and

overlap certainly exists with theissues that face professional sportsand other types of employment,which is especially true ofquestions concerning privacy andconfidentiality. At what point doesthe information become sopersonal to the player that theplayer’s privacy rights may beviolated? Does a player have anyreasonable expectation ofconfidentiality in any informationabout him - including the data thatthe team or the league collects?In a non-sports context, litigation

around Dutch employee wellnessprogrammes using wearables hashalted such initiatives in theirtracks. The Netherlands’ DataProtection Authority investigatedtwo companies with wearabletechnology programmes and ruledearlier this month that employeesare financially dependent on theiremployers and therefore don’t havethe power to give consent when itcomes to revealing sensitivepersonal data including movementand sleep patterns. Experts believethe Dutch ruling could potentiallyimpact the development of policiesaround the globe with regard towearable technology use.There are also questions unique

to pro sports.If, for example, the NFL collects

the RFID data on players from allof the teams, are teams and playersentitled to see and use that data? Ifso, what data should teams haveaccess to? Their own? Other teams?Beyond teams and leagues, who

in the outside world can - and does- have access to the data, and forwhat purposes? Whether - and towhat extent - analytical data onindividual players will be shared(with or without confidentialityprotections) with broadcastpartners, sports commentators andanalysts. What about video gamesand fantasy sports - do theindividual players have any say inwhat information is given to game

WEARABLES

14

event than their grandparents - oreven their parents - did in the past.The mountains of newinformation and statistics aboutthe performance of their teams andplayers, which are made possible bythe RFID, are broadcast in realtime. Media partners receive dataincluding player velocity, effort andfatigue to be used to add to the fanexperience - with real time overlaysand visualisations, as well as XboxOne’s data enriched replays.Thanks to their $400 millioncontract with the league, Microsofthas also incorporated NGS in anumber of ways. Their NGS Pick‘Em competition during the 2015season encouraged fans to use thesensor driven statistics to select theplayer that would post the bestoverall Next Gen Stats andawarded tickets to Super Bowl 50as part of the prize package.Microsoft’s Xbox One NFL appeven features the ability to watchreplays from multiple angles of keyplays. Those that take their passionto the fantasy league level enjoyaccess to the same data gatheredfrom wearables. Fantasy footballcoaches have the capacity to drilldown into the data collected fromeach athlete in every play of theentire season.The league is also using data to

enhance fans’ ‘second screen’experience. In 2014 the NFL foundthat 60-70% of fans use a secondscreen while watching live games -either in the stadium or at home.The league noted spikes in tweettraffic that perfectly aligned withthe interesting moments in games.At the same time, viewers of thelive game on TV were at an all-time high. At the rollout of NFLNow, an app that collects contentcreated 24 hours a day, seven days aweek from all 32 teams, the leaguenoted the deep, wide well ofinformation available to fans,including historic data culled fromthe NFL Films Library.

Brian Socolow

manufacturers or fantasy sportsplatforms under agreements withsports leagues?Protecting players’ privacy is

certainly top of mind for theirunions. Representatives from theplayers’ unions for the major USsports leagues reportedly met lastfall with the law firm that hasrepresented them for severaldecades to discuss how technologyis being used in their sports andthe many privacy concerns facedby their players.Beyond the sanctioned use of

data by the league and teams, thereis the very real risk of inadvertentdata leaks and purposeful hacks.The vast amount of data thatprofessional sports teams andleagues may eventually collect,store and use would give ‘stealingthe other guy’s playbook’ a wholenew meaning. Chris Correa, aformer scouting director of the St.Louis Cardinals, recently admittedhe hacked the Houston Astros’player database and email system.Correa pleaded guilty to fivecounts of unauthorised access to aprotected computer from 2013 toat least 2014. Correa’s use of thestolen information cost Astrosabout $1.7 million. The chargescarry up to five years in prisoneach; Correa will be sentenced inApril.At the moment, it is still unclear

what regulatory scheme, if any,would offer any protection and, inthe professional sports realm, whatconstitutes reasonable cybersecurity protection for informationcollected from wearable technologydevices. And, as the data becomesincreasingly detailed, the risksincrease: hacking by stalkers,improper use by management,demands by insurers, or requestsfor discovery in litigation.

Employment and labor concernsWhether and to what extent teamsand leagues can impose the

collection of personal data onplayers, and what can then be donewith the player data - includingwho has access to it - is certainly anissue to be covered by collectivebargaining agreements and playercontracts. For example, theannouncement by the IFAB andFIFA that approved the use ofwearable electronic performanceand tracking systems in matcheshas created an atmosphere thatfavours increased adoption oftechnology in internationalfootball, but the pace and level ofadoption remains an open issue tobe resolved between leagues, teamsand players. For example, whileMajor League Soccer’s most recentcollective bargaining agreementreportedly calls for the league toapprove the use of wearabledevices in consultation with theplayers’ union, whether teams cancompel players to wear thetechnology at the team level duringmatches is an open issue.While player performance

statistics and other data havealways played a role in salary andcontract negotiations, untilrecently the categories of dataavailable have been limited. As theavailability of data grows, however,so too does the possibility thatanalytics may reveal information,including previously undetectablebiometric data, minute changes inplayer ability, or indicators of long-term health and future injurytendencies - information thatteams may interpret to predictfuture declines in performance,even for athletes currentlyperforming at the top of theirgames, and use this data in salaryand contract talks. And access tothis data may be one-sided, ifteams and leagues are collectingbut not sharing data.

What’s next for pro sports?In the world of professional sports,as in the world at large, innovation

in wearable technology tends tooutpace the development of rules,regulations or guidelines on its use.Pro sports leagues and teams willcontinue to grapple withimportant issues - privacy, datasecurity and ownership, and labourconcerns, as the applicable body of‘law’ - rules established throughcollective bargaining agreements,regulations enacted by governingbodies, legislation developed incountries around the world, andthe inevitable litigation - takesshape around the collection, useand distribution of informationgleaned from wearable technology.

Brian Socolow PartnerLoeb & Loeb LLP, New [email protected]


WEARABLES


Human rights violations insidethe Qatar World Cup siteAmnesty International (‘AI’) has released a second report on theconditions of migrant workers participating in the constructionof venues for the 2022 World Cup in Qatar: The ugly side of thebeautiful game: exploitation on a Qatar 2022 World Cup site. AI’sDirector of Global Issues and Research, Audrey Gaughran spoketo World Sports Law Report about the role FIFA and memberassociations should play in monitoring working conditions inWorld Cup construction sites.

Qatar issued the Workers’ Welfare Standards (‘WWS’) in 2014which, according to the report, have not been upheld. ShouldQatar request external assistance to enforce these standards?The WWS are enforced by Qatar’s Supreme Committee forDelivery and Legacy, which has demonstrated a consistentcommitment to ensuring the rights of workers on World Cupsites are protected. However, there are some fundamentalproblems with the Supreme Committee’s approach tomonitoring and enforcing the WWS, as demonstrated by theabuses discovered at the Khalifa Stadium project.The Supreme Committee relies too greatly on compliance

audits, and in some cases self-audits by companies. In Al’sexperience corporate self-reporting doesn’t work. The SupremeCommittee has put in place an external auditor - announced inApril. This may provide greater oversight of the WWS, butauditing alone will not identify or address all of the breaches weidentified at the Khalifa Stadium.It is not so much a question of needing external assistance as a

question of changing the approach to monitoring and enforcingthe WWS. The Committee should also take a more investigativeapproach to identifying breaches of the WWS. The SupremeCommittee’s focus has been substantially on the quality ofaccommodation. While this is important, other serious issuesincluding deception in the recruitment process, the practice ofpaying workers several months in arrears, and forced labourhave not received sufficient attention.We are calling on the Qatari authorities to end the system

whereby employers have any influence over whether a personcan leave Qatar and to ensure migrant workers can change jobswithout seeking the permission of their sponsor. In addition,Qatar must increase its capacity to detect and address breachesof the country’s labour laws. While the WWS being betterenforced would help significantly, the Standards do not addressthe core problem of the sponsorship system. This is somethingwe are calling on the Qatari government to address.

Audrey Gaughran speaks to World Sports Law ReportWe have recommended, however, that FIFA carry out its own

independent inspections of labour conditions in Qatar, makingall inspections, their findings and remedial actions public.

Given FIFA’s current standing (regarding allegations ofcorruption), is it advisable for the organisation to take an activestand on Qatar’s commitment to respect labour rights?Absolutely. Having awarded the 2022 FIFA World Cup to Qatar,it is incumbent on FIFA to engage in a robust and ongoingprocess of human rights due diligence that addresses the specificrisks and actual impacts on the rights of individuals. On theevidence presented, this is not happening. FIFA’s continuedfailure to take any meaningful action on the issue of labourexploitation means that thousands of migrant workers involvedin World Cup construction sites are at risk of exploitation.Moreover, as football fans who travel to Qatar for the WorldCup will stay in hotels, eat in restaurants and otherwise engagewith service industries in which migrant workers are employed,FIFA must consider the wider human rights context of migrantworkers in Qatar as part of its human rights due diligence.

Should member associations push the newly elected President toreview Qatar’s policies and practices?National associations have a major interest in making sure FIFAtakes action. It is their national football teams who will bestaying in hotels and training camps staffed by migrant workers,training on pitches grown, laid and maintained by migrantworkers, and playing in stadiums built by migrant workers.Those teams are the pride of their country: nobody, not thefans, not the associations, wants to see them playing in atournament built on abuse.National associations should push Gianni Infantino to take the

lead. Since our report came out last week, FIFA’s approach hasbeen the same as always - pointing to vague reforms butindifferent to some shocking abuses. Infantino is nowhere to beseen on the issue, in marked contrast to Qatar’s SupremeCommittee who at least agreed to take media interviews on thesubject. Gianni Infantino has to publicly ask Qatar to makeurgent reforms with a concrete timetable ahead of the expectedpeak in World Cup stadium construction in mid-2017.

Audrey Gaughran Director of Global IssuesAmnesty InternationalContact via the editorial team

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Q&A

Documents

VOLUME 14 ISSUE 04 APRIL2016 .../media/Files/People/Ryan Frank/wslr_april_2016.pdfpractised as a solicitor in Hong Kong. [email protected] PROFESSORLORNECRERAR Harper Macleod